The comptroller and auditor general Sir John Bourn has warned he may need to
qualify DEFRA’s future annual report and accounts if it is fined by the European
Commission for the rural payments fiasco. He also warned of underlying ‘wider
difficulties’ in its financial management.

The criticisms will add to the pressure on the department, which is currently
handling the bird flu outbreak.

Sir John attached notes to the 2006/07 accounts pointing out the department
had established provisions totalling £348m for potential disallowances that
Brussels could impose.

The RPA failed to make payments totalling £1.4bn on time a year ago year to
farmers and landowners, with on-going failures in 2006/07.

Sir John noted a £6.4bn underspend by DEFRA and also criticised the lateness
of the departments accounts.